ML Analysis — ADVENTIST HEALTH MENDOCINO COAST
CCN 051325 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Hold / Selective — investigate specific opportunities but be prepared for execution risk.
57
/ 100 (C)
Financial Health7/25
RCM Upside18/25
Market Position15/20
Demand Defensibility6/15
Operational Efficiency10/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-1.7%
R²=0.34 | n=4,907 | Grade B | Actual: -3.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-30.0%, 26.6%]. P58 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 3089052.520 | +0.2107 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 3193152.320 | -0.1892 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 3.219 | -0.0268 | Lower Log(Beds) decreases predicted margin | |
| Net-to-Gross | 0.602 | +0.0262 | Higher Net-to-Gross increases predicted margin | |
| Reimbursement Quality | 0.291 | -0.0257 | Higher Reimbursement Quality decreases predicted m |
Turnaround: 47%Turnaround possible (47%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
49.1%
Distress Risk
$4.0M
RCM Opportunity
D
Opportunity Grade
1.8%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P49. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| PROMEDICA HICKMAN HOSPITAL | MI | 58 |
| WATAUGA MEDICAL CENTER | NC | 95 |
| ST LUKES HOSPITAL - EASTON CAMPUS | PA | 29 |
| CULPEPER MEMORIAL HOSPITAL | VA | 70 |
| SOUTHSIDE COMMUNITY HOSPITAL | VA | 80 |
| SPECTRUM HEALTH LUDINGTON | MI | 45 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.602 | +0.104 | ▲ risk |
| Revenue Per Bed | 3089052.520 | -0.089 | ▼ risk |
| Medicaid Day Pct | 0.007 | -0.082 | ▼ risk |
| Occupancy Rate | 0.480 | +0.042 | ▲ risk |
| Medicare Day Pct | 0.510 | +0.031 | ▲ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.0M
Current margin: -3.4%
Projected margin: 1.8%
Grade: D
Comps: 71
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Payer Mix Optimization | 0.483 | 0.653 | 17.0% | $2.5M | 50% | 24mo |
| Occupancy Improvement | 0.480 | 0.687 | 20.8% | $1.4M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.602 | 0.614 | 1.2% | $111K | 65% | 18mo |
Predicted RCM Performance (Public Data Only)
A
RCM Grade
Strong RCM profile — likely low-risk from an operations perspective. Focus diligence on growth thesis.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 2.0% | [2.0%, 25.0%] | P0 | Strong — predicted denial rate is in the top third nationall |
| Days in AR | 28.7 | [25.0, 75.0] | P48 | Strong — predicted days in ar is in the top third nationally |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.5% | [90.0%, 99.5%] | P8 | Strong — predicted net collection rate is in the top third. |